Over the last few months, there have been occasional articles in the media about the Competition Bureau advising the Canadian Real Estate Association (CREA) that they would be taken before the Competition Tribunal to determine if the rules surrounding postings to the MLS® were anti-competitive. Talks between CREA and the Competition Bureau were proceeding smoothly, and then the Competition Bureau made a surprise announcement that they were ending the talks and taking CREA to the tribunal.
One of the clearest discussions on this topic is an interview by Bill Good on CKNW AM980 radio in Vancouver. He interviewed Don Campbell, author of Real Estate Investing in Canada on the subject of the Competition Bureau and CREA. Click here to listen to the interview.
So, what does the Competition Bureau mean by “anti-competitive”?
Well, one of the MLS® rules states that only REALTORS® can post properties on the MLS® system. Personally, I think this is perfectly fine. REALTORS® have created, developed and paid for the MLS® system. Why on earth should someone who does not own and does not pay for the system have access? If you still think the MLS® system should be open to everyone, would you also agree that that the Canadian Lung Association’s website should be required to allow ads from the tobacco companies? A little extreme perhaps, but allowing access to anyone will simply hurt the integrity of the information posted on the MLS®. REALTORS® are required to follow rules and regulations to ensure that the information you see on MLS® is accurate. This is one of the reasons why the MLS® service is so popular – we can all rely on the information that is contained within the system.
Another of the CREA rules that the Competition Bureau doesn’t like states that REALTORS® must represent their clients, from the beginning to the end of the sale process. The Competition Bureau wants the rules changed so that representation is not a requirement. However, this does not protect the consumer, and may also contradict with agency laws in different provinces.
The media “sound bites” are saying that commissions will be reduced if the Competition Bureau has their way. But, the Competition Bureau’s findings do not deal with commission. Commission rates are negotiable with the individual agent. And, there are many different business models in the marketplace, from low service companies that charge a flat fee to list your property, to full service companies that charge a higher rate but also provide full representation, advertising of your property, staging, photography, open houses (both agent and public), feature sheets, flyers, signs and more. It’s your choice of who to hire to sell your house - a low-cost, low-service, low return on investment provider or a higher cost, full-service, higher return on investment provider. It’s sort of like the difference between a fast-food hamburger or a fine-dining steakhouse. Both options are fine, but you get a different experience with each.
Another option that sellers have is to use one of the “home for sale by owner” websites. If you Google “home for sale by owner”, there are several million websites that come up. Choose one – or as many as you can afford. Then, do the following:
- Enter your credit card information – yes, you have to pay up front. (note: if you choose a REALTOR® , you only pay on the closing date if the home sells – and if it doesn’t sell, there’s no cost to you). Next, enter your property’s information and wait.
- How did you come up with your price? Did you pay an appraisal company to give you the right price? Don’t forget – if your home doesn’t appraise properly if you find a buyer, the deal won’t be approved by the bank. And, you probably won’t know about the deal falling apart until the closing date. That should be fun.
- Hire a home stager for a couple of hundred dollars to give you tips on how to stage your home. Spend some more money if you want them to do the work.
- Pay a few hundred dollars for a decent sized ad in the newspaper. Do it again next week. And, again. Still not sold? Do it again.
- Be available to show your home when it’s convenient to the buyer, not you. Answer the phone for any inquiries – don’t forget to qualify the buyer. After all, you have access to their credit history and pre-approval with the bank, right?
- Tele-market your home to the hundreds of people you know who are looking to buy a home in your neighbourhood. You do have a list of buyers, right?
- Host Open Houses each weekend. Don’t forget to buy professional signs (they’re about $75 each) to direct people to your Open House. After all, you don’t want to appear “amateurish” do you? Remember to follow the city by-laws when posting your Open House signs. You do know the by-laws, right?
- Be ready to accept a low-ball offer. The buyer knows you’re trying to save money on commissions, so they’ll also try to save money. It’s only fair.
- If you accept an offer, is it a legally-binding document? Do the conditions protect you, or the buyer? Have real estate laws been followed? Better hire a lawyer to make sure. That can’t be too expensive, eh?
It sounds like I’m against selling a home yourself. I am – but then I’m also against self-dentistry, self-legal representation, etc. Anyone can post a picture and description on a website. But that’s not what sells your house, and that’s not why you should hire a REALTOR®. There’s a reason that companies hire sales professionals, and that’s to sell their product at the best price. It’s the same reason that home owners should hire a REALTOR® to sell their home. REALTORS® bring sales skills, contacts, experience and knowledge.
So, I’ve outlined a few different options - and there is definite value in hiring a full-service REALTOR® like myself. Anti-competitive? I think not.
Professional service. Expert advice.
Jim Datlen is a Sales Representative with Century 21 Millennium Inc., Brokerage, in Brampton, ON.